What Happened?
Shares of industrial conglomerate 3M (NYSE: MMM) fell 4.2% in the afternoon session after the company reported second-quarter earnings that, despite beating expectations on an adjusted basis, revealed underlying concerns for investors.
The company posted strong adjusted second-quarter results, beating analyst estimates for both earnings and revenue, and even raised its full-year profit forecast. 3M reported adjusted earnings per share of $2.16, ahead of the $2.01 consensus, and raised its full-year guidance to a range of $7.75 to $8.00 per share. However, investors appeared to focus on less favorable details within the report. The company's results under Generally Accepted Accounting Principles (GAAP) showed a 38% year-over-year decrease in earnings per share. Furthermore, 3M reported a negative operating cash flow of $1.0 billion for the quarter. This was primarily driven by $2.2 billion in net after-tax payments for significant litigation costs related to Public Water Systems and Combat Arms Earplugs settlements. Renewed worries about the impact of global trade tariffs also seemed to cloud the otherwise positive report for investors.
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What Is The Market Telling Us
3M’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 17.6% on the news that the company reported strong second-quarter earnings. 3M beat analysts' revenue, operating profit, and EPS expectations. That the company raised full year EPS guidance was also a great sign. Overall, this was a really good quarter that should please shareholders.
3M is up 17.1% since the beginning of the year, and at $151.85 per share, it is trading close to its 52-week high of $159.04 from July 2025. Investors who bought $1,000 worth of 3M’s shares 5 years ago would now be looking at an investment worth $971.09.
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